(US LAW) nonprofit corporation; legal status permitted to certain types of organizations under Treasury Regulations section 501(c)(3) that exempts it from taxation.
The 501(c)(3) is quite easy to organize, especially if one wants to funnel money from donors to some form of activism. It was first made available in 1934 but has become extremely common since 1986 because successive rulings greatly loosened restrictions on electioneering for 501(c)(3) entities.
Often 501(c)(3) entities engaged in politics are affiliated with an almost-identical 501(c)(4) entity, which has EVEN WEAKER limitations on electioneering.
The 501(c)(3) is quite easy to organize, especially if one wants to funnel money from donors to some form of activism. It was first made available in 1934 but has become extremely common since 1986 because successive rulings greatly loosened restrictions on electioneering for 501(c)(3) entities.
Often 501(c)(3) entities engaged in politics are affiliated with an almost-identical 501(c)(4) entity, which has EVEN WEAKER limitations on electioneering.
The 501(c)(3) clause in the IRS code is practically an invitation by the government to launder corporate profits into lobbying.
by Sorry, the good guys lost September 10, 2010
(FINANCE) leveraged buy-out; when a takeover artist like Kohlberg Kravis Roberts & Co (KKR) arranges to borrow huge amounts of money at high interest, buy a controlling interest in a corporation, and then replace the management so its more profitable. The new profits then pay off the cost of buying the company.
Usually a takeover artist requires a vehicle corporation to carry out an LBO. For example, T. Boone Pickens used Mesa Petroleum against Union Oil in the 1980's.
by Sorry, the good guys lost September 02, 2010
(FINANCE) when a corporate raider initiates a hostile takeover of an undervalued corporation with the intent of forcing the management to buy him off.
HOW IT WORKS
A corporate raider engaged in greenmail requires a takeover vehicle to launch a hostile takeover. The takeover vehicle is usually another corporation controlled by the raider, although in recent years ESOPs have been used (e.g., Tribune Corp., 2007). The vehicle buys up a lot of shares of the target company's stock on the market, then announces it wants to acquire a controlling interest.
Management opposes the takeover bid. It can (a) challenge the legality of the takeover, (b) adopt a charter that makes it hard for the takeover vehicle to run the company it's proposing to buy (a poison pill), (c) seek another buyer that is more favorable (a white knight), or (d) borrow a ton of money and buy so many shares that the stock price goes up.
The raider makes a tender offer for the shares he doesn't own. If the target picks (c) or (d), then the raider will probably make a huge amount of money when he suddenly dumps all his shares on the market. His tender offer probably started a bidding war with management, driving share prices to something very high.
WHAT CAN GO WRONG
The management can use (a) or (b) successfully, or it can use (e), viz., launch a hostile takeover bid of the target vehicle. The raider can lose of lot of money if a lot of shareholders have accepted his tender offer.
HOW IT WORKS
A corporate raider engaged in greenmail requires a takeover vehicle to launch a hostile takeover. The takeover vehicle is usually another corporation controlled by the raider, although in recent years ESOPs have been used (e.g., Tribune Corp., 2007). The vehicle buys up a lot of shares of the target company's stock on the market, then announces it wants to acquire a controlling interest.
Management opposes the takeover bid. It can (a) challenge the legality of the takeover, (b) adopt a charter that makes it hard for the takeover vehicle to run the company it's proposing to buy (a poison pill), (c) seek another buyer that is more favorable (a white knight), or (d) borrow a ton of money and buy so many shares that the stock price goes up.
The raider makes a tender offer for the shares he doesn't own. If the target picks (c) or (d), then the raider will probably make a huge amount of money when he suddenly dumps all his shares on the market. His tender offer probably started a bidding war with management, driving share prices to something very high.
WHAT CAN GO WRONG
The management can use (a) or (b) successfully, or it can use (e), viz., launch a hostile takeover bid of the target vehicle. The raider can lose of lot of money if a lot of shareholders have accepted his tender offer.
The most successful greenmail practitioner was T. Boone Pickens, who used Mesa Petroleum (now Pioneer Oil) to greenmail six companies. Eventually he was ousted from his own company.
by Sorry, the good guys lost September 04, 2010
(BUSINESS) in a hostile takeover, the business entity that will be the new owner. Usually a takeover vehicle is a corporation in an industry related to that of the target company.
In cases where the takeover is not NECESSARILY hostile, the term "acquisition vehicle" is used.
In cases where the takeover is not NECESSARILY hostile, the term "acquisition vehicle" is used.
by Sorry, the good guys lost September 04, 2010
(US LAW) tax-exempt nonprofit as defined under Treasury Code section 503(c)(4). Very similar to a 501(c)(3), but while a 501(c)(3) is more completely exempt from taxes, a 501(c)(4) has more leeway in what sorts of political activities it may engage in.
For example, a 501(c)(4) organization may explicitly endorse a ballot position or candidate, whereas a 501(c)(3) may not.
For example, a 501(c)(4) organization may explicitly endorse a ballot position or candidate, whereas a 501(c)(3) may not.
There are many examples of 501(c)(3) organizations paired with 501(c)(4) organizations. This arrangement is known as the "Sibling Option" and is used by the Koch Family Foundations for funding Tea Bag political associations.
by Sorry, the good guys lost September 10, 2010
(BUSINESS) when a corporate raider attempts to take control of a corporation against the will of the management. Takeover requires a leveraged buyout typically financed with junk bonds.
HOW IT WORKS
The corporate raider requires a takeover vehicle to launch a hostile takeover. The takeover vehicle is usually another corporation controlled by the raider, although in recent years ESOPs have been used (e.g., Tribune Corp., 2007). The vehicle buys up a lot of shares of the target company's stock on the market, then announces it wants to acquire a controlling interest.
Management opposes the takeover bid. It can (a) challenge the legality of the takeover, (b) adopt a charter that makes it hard for the takeover vehicle to run the company it's proposing to buy (a poison pill), (c) seek another buyer that is more favorable (a white knight), or (d) borrow a ton of money and buy so many shares that the stock price goes up.
The raider makes a tender offer for the shares he doesn't own. At a certain point, he may acquire sufficient control that he can legally challenge the target's management to step down.
WHAT CAN GO WRONG
The management can use (a) or (b) successfully, or it can use (e), viz., launch a hostile takeover bid of the target vehicle. The raider can lose of lot of money if a lot of shareholders have accepted his tender offer.
HOW IT WORKS
The corporate raider requires a takeover vehicle to launch a hostile takeover. The takeover vehicle is usually another corporation controlled by the raider, although in recent years ESOPs have been used (e.g., Tribune Corp., 2007). The vehicle buys up a lot of shares of the target company's stock on the market, then announces it wants to acquire a controlling interest.
Management opposes the takeover bid. It can (a) challenge the legality of the takeover, (b) adopt a charter that makes it hard for the takeover vehicle to run the company it's proposing to buy (a poison pill), (c) seek another buyer that is more favorable (a white knight), or (d) borrow a ton of money and buy so many shares that the stock price goes up.
The raider makes a tender offer for the shares he doesn't own. At a certain point, he may acquire sufficient control that he can legally challenge the target's management to step down.
WHAT CAN GO WRONG
The management can use (a) or (b) successfully, or it can use (e), viz., launch a hostile takeover bid of the target vehicle. The raider can lose of lot of money if a lot of shareholders have accepted his tender offer.
Prior to 1980, the hostile takeover was unknown; banks would never lend money for such a scheme. For one thing, the risks were ridiculous. For another, "success" would hurt way too many people.
Everything changed when Michael Milken revolutionized the junk bond market, allowing raiders to attempt deals that violated sound business judgment. The defeated company was compelled to pay for its own conquest.
Everything changed when Michael Milken revolutionized the junk bond market, allowing raiders to attempt deals that violated sound business judgment. The defeated company was compelled to pay for its own conquest.
by Sorry, the good guys lost September 04, 2010
(BUSINESS) Wichita, Kansas-based conglomerate; pronounced "coke." A closely held corporation; owns Flint Hills Resources, a major refinery operator.
One of the most secretive business enterprises in the Western world. The financial press is not allowed to publish any financial statistics on the firm whatever (unlike, say, Bechtel or Fidelity Investments, whose financials appear in Hoovers listings). Basically, it converts oil wealth into political influene through a huge web of "foundations."
Koch Industries operates enormous oil refineries in Alaska, Minnesota, and Texas; owns 4000 miles of pipeline; Brawny paper towels, Dixie cups, Georgia-Pacific lumber, Stainmaster carpet, and Lycra (fiber used to make Spandex).
Koch Family Foundations funnel immense amount of money to climate change denial groups, although they manage to remain secretive about that also. Both David and Charles Koch have assets easily in excess of $8 billion, and they are the largest political donors of the oil and gas industry. Mostly their "charitable foundations" promote far-right propaganda.
One of the most secretive business enterprises in the Western world. The financial press is not allowed to publish any financial statistics on the firm whatever (unlike, say, Bechtel or Fidelity Investments, whose financials appear in Hoovers listings). Basically, it converts oil wealth into political influene through a huge web of "foundations."
Koch Industries operates enormous oil refineries in Alaska, Minnesota, and Texas; owns 4000 miles of pipeline; Brawny paper towels, Dixie cups, Georgia-Pacific lumber, Stainmaster carpet, and Lycra (fiber used to make Spandex).
Koch Family Foundations funnel immense amount of money to climate change denial groups, although they manage to remain secretive about that also. Both David and Charles Koch have assets easily in excess of $8 billion, and they are the largest political donors of the oil and gas industry. Mostly their "charitable foundations" promote far-right propaganda.
In the spring of 2010, University of Massachusetts at Amherst’s Political Economy Research Institute named Koch Industries one of the top ten air polluters in the United States.
The Americans for Prosperity Foundation (formerly Citizens for a Sound Economy) and the Cato Institute are creations of the Koch Family Foundations.
The Americans for Prosperity Foundation (formerly Citizens for a Sound Economy) and the Cato Institute are creations of the Koch Family Foundations.
by Sorry, the good guys lost September 02, 2010